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E SCROW
P ROC E S S
WHAT IS AN ESCROW
An escrow is a process wherein the Buyer and
Seller deposit written instructions, documents,
and funds with a neutral third party until certain
conditions are fulfilled. In a real estate
transaction, the Buyer does not pay the Seller
directly for the property. The Buyer gives the
funds to an escrow company who, acting as an
intermediary, verifies that title to the property
is clear and all written instructions in the
contract have been met. Then the company
transfers the ownership of the property to the
Buyer through recordation and pays the Seller.
This process protects all parties involved.
The State of Arizona licenses and regulates all
title and escrow companies. The Department of
Insurance and the Department of Financial
Institutions can inspect a company’s records at
any time, providing further oversight of the
company’s management and qualification to
act as an impartial third party to the
transaction.
In Arizona, escrow services are generally
provided by a title insurance company instead
of an attorney. The stability, reliability and
performance of your title and escrow company
are vital to protect the interests of all parties to
the transaction.
HOW IS AN ESCROW OPENED?
Once you have completed the contract (or
Purchase Agreement), and the Seller has
accepted the offer, your REALTOR
®
will open
escrow. The earnest money deposit and the
contract are placed in escrow. As a neutral
party to the transaction, Security Title can
respond only to those written instructions
agreed to mutually by all “interested” parties
(Seller and Buyer); Security Title cannot
otherwise alter the contract or create
instructions, and that protects all parties to the
transaction.
You should inform your escrow officer and
lender as soon as possible of how you wish to
hold title to your home and exactly how your
name(s) will appear on all documents. This
allows your lender and Security Title to prepare
all documents correctly. Changes later, such as
adding or deleting an initial in your name, can
delay your closing. You may wish to consult an
attorney, accountant or other professional
before deciding how to hold title.
HOW TO HOLD TITLE
WHAT HAPPENS AT SECURITY TITLE
During the escrow period, our title department begins researching
and examining all historical records pertaining to the subject property.
Barring any unusual circumstances, a commitment for title insurance
is issued, indicating a clear title or listing any items which must be
cleared prior to closing. The commitment is sent to you for review.
Your escrow officer follows the instructions on your contract,
coordinates deadlines, and gathers all necessary paperwork. For
example, written requests for payoff information (called “demands”)
are sent to the Seller’s mortgage company and any other lien holders.
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